JPMorgan’s New CIO was LTCM Trader and Early Doubter of Madoff

Ina Drew is out, and the crisis-loving head of JPMorgan’s chief investment office tossed overboard after the lender disclosed massive trading losses last week has been replaced by Matt Zames, co-head of global fixed income and a newly-minted member of the firm’s operating committee. Who is Matt Zames?

For one thing, no stranger to financial catastrophe: A trader at Long-Term Capital Management, the hedge fund rescued by the Fed following spectacular losses in the Russian financial crisis in 1998, and an earlyish doubter of one Bernard Madoff. (According to Madoff trustee Irving H. Picard, in 2007 Zames warned John Hogan, then the chief risk officer for JPMorgan’s investment bank, that Madoff may have been running a Ponzi scheme, though the executives didn’t alert regulators.)

Zames came to JPMorgan in 2004 to run trading in Treasuries, agency bonds, interest-rate swaps and options, according to Bloomberg, and was tapped to head fixed income when Jes Staley took over the lender’s investment-banking operations in 2009.

That same year, Zames was named chairman of the Treasury Borrowing Advisory Committee, a 14-member panel of finance professionals that meets quarterly with the Treasury to provide market perspective and advice on the government’s debt management issues, and in which capacity he authored along letter to Tim Geithner on the importance of raising the debt-ceiling last summer post haste.

Said Jamie Dimon: “Matt Zames is a world-class risk manager and executive—highly regarded for his judgment and integrity.”